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ITEM 4 People Service contract renewalC1Ty 0 ot e F 0 - MINNESOTA g DEPARTMENT INFORMATION Requestfor City Council Action ORIGINATING DEPARTMENT: Administration REQUESTOR: Lori Johnson, City Administrator MEETING DATE: February 20, 2013 PRESENTER(s): Lori Johnson, City Administrator REVIEWED BY: Andy MacArthur, City Attorney ITEM #: 4 AGENDA ITEM DETAILS RECOMMENDATION: Provide notice of.cancellation to PeopleService, Inc. as required by the current contract to preserve the City's ability to renegotiate or terminate the contract. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No I No BAC KGROUNDMUSTIFICATION: The City currently contracts with PeopleService, Inc. for operation of the City's water and sewer systems. The current five year contract contains an automatic renewal clause unless written notice of cancellation is given 90 days prior to the date of expiration. Thus, if any changes are requested to the contract or if the contact will be cancelled, notice is required by March 9, 2013. When the annual approval of PeopleService, Inc.'s Consumer Price Index (CPI) was approved on June 25, 2012, it was noted that the continuation of this contract would be reviewed in 2013 consistent with the City's strategic planning goal to "assess the efficiency and effectiveness of City services." The Council concurred that a decision on the contract would be made in 2013. The current contract amount paid to PeopleService, Inc. is $580,380 of which $96,427' is for chemicals a n d maintenance costs. In the past, a C1 P a di ustm e nt has been required by the contract SUPPORTING DOCUMENTS: x o ATTACHED u NONE 0 Resolution Directing City Staff to Serve Notice of Cancellation of Operation and Maintenance Agreement on PeopleService, Inc. 0 Current PeopleService, Inc. contract and addendurns POSSIBLE MOTION Please word motion as you %yould like it to appear in the minutes. Motion to approve Resolution 2013-11 Directing City Staff to Serve Notice of Cancellation of Operation and Maintenance Agreement on PeopleService, Inc. BUDGET INFORMATION FUNDING: I BUDGETED: OYES o NO ACTION TAKEN o APPROVED AS REQUESTED o DENIED ii TABLED a OTHER (List changes) COMMENTS- CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO.2013-11 RESOLUTION DIRECTING CITY STAFF TO SERVE NOTICE OF CANCELLATION OF OPERATION AND MAINTENANCE AGREEMENT ON PEOPLESERVICE, INC. WHEREAS, the City of Otsego (OTSEGO) and PEOPLESERVICE, INC. (PEOPLESERVICE) entered into a five year Operation and Maintenance Agreement dated June 9, 2013; and WHERF,AS, said Agreement was Amended on July 1, 2009 and April 1, 2010, neither amendment affects the conditions of Agreement termination; and WHEREAS, Article V of the Agreement states that the Agreement will automatically renew for successive one year terms unless written notice of cancellation is given by either party no less than ninety (90) days prior to the date of expiration. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Otsego, Wright County, Minnesota as follows: City staff are hereby directed to cause written notice of cancellation of the Operation and Maintenance Agreement to be delivered to PEOPLESERVICE more than ninety days prior to the expiration of the Operation and Maintenance Agreement pursuant to the terms and conditions of that Agreement. ADOPTED this 20"' day of February, 2013. MOTION made by Council Member and seconded by Council Member a IN FAVOR: OPPOSED: CITY OF OTSEGO Jessica Stockamp, Mayor Tam i Loff, City Clerk OPERATION AND MAINTENANCE AGREEMENT This Operation and Maintonance Agreement (the "Agreement") dated as of 20081 is between the City of Otsego, Minnesota, a municipal corporation (the "Owner"), whose address is 8899 Nashua Avenue NE, Otsego, Minnesota 55330} and PEOPLESERVICE, INC., and its successors and assigns (" Poop leService") , whose address is 209 S. 19th Street, Suite 555, Omaha, Nebraska 68102. RECITALS.: WHEREAS, Owner is the owner of a municipal water and wastewater treatment facility as described in Exhibit A to this Agreement the "Facilities"); and WHEREAS, Owner desires to engage PeopleService to operate and maintain the Facilities on behalf of Owner and PeopleService desires to accept such engagement, all upon the terms and conditions hereafter set forth; and WHEREAS, Owner is authorized by law to enter into this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties agree as follows: ARTICLE I -SCOPE OF SERVICES 1A Commencing on July 1, 2008, or such other date mutually acceptable in writing to PeopleService and Owner (the "Effective Date"), PeopleService will provide all routine operation and maintenance of Owner's Facilities on a 7 day per week basis within the design capacity of the Facilities as described in Exhibit A to this Agreement ("Description of Facilities"). The routine operation and maintenance services to be provided by PeopleService are further described in Exhibit B of this Agreement. H*AvAYvAfscntfcClot seqo.wp6 I 1.2 Commencing with the Effective Date of this Agreement, PeopleService shall continue the use of its standard operating procedures and preventive maintenance and process control programs, including documentation of operation and maintenance procedures conducted for the water and wastewater utility system, Such records shall be available for inspection by Owner at all reasonable times. 1.3 PeopleService will be responsible for expenses incurred in the routino operation and maintenance of the Facilities, including personnel services, communication set -vices consisting of three (3) phone lines and the high speed internet service (electricity, natural gas and diesel fuel used for the backup generator shall remain the responsibility of the Owner), chemicals (subject to the provisions contained in Section 4.3 of this Agreement), materials, supplies, contracted services, insurance, and equipment repair (subject to the provisions contained in Sections 1.4 and 2.1.b of this Agreement). M PeopleService shall provide all required maintenance to preserve the existing life of all assigned equipment and vehicles of the Facilities. PeopleService will bear the expense of maintenance and repair of all equipment, physical facilities, and vehicles assigned for PeopleSer&e'S arse, except for capital replacement expenditures as defined in section 2.1 (b), provided that such expense does not exceed a maximum annual maintenance/repair (noncapital) expenditure of $30,000 for tho first year of this Agreement. In subsequent years, the maximum annual maintenance/repair expenditure will be increased by the C.P.l. adjustment contained in section 4,2 of this Agreement. In performing maintenance and repairs, PeopleService will perform in an economical manner and make all reasonable efforts to remain below the annual maintenance/repair expenditure amount while remaining in compliance with all applicable regulations. PeopleService will refund to Owner any unused monies less than the maintenance/repair expenditure amount, In the event that such expenses approach or oxcood this maximum annual amount, PeopleService shall promptly notify Owneri . Any repair expenses n excess of the iflaxinium amount set forth in this provision shall be approved by Owner. PeopleService shall invoice Owner the amount of maintenance/repair expenses in excess of the maximum annual maintenance/repair limit set forth in this provision at the and of the 12-tinoath period, Owner shall reirnburse PeopleService . for such excess expenditures. H:mvvAfscntrot\0tsego,wp8 1.5 PeopleService will provide properly certified employees for the staffing of Facilities. Backup services will ba providod by PeopleService corporate personnel. In addition, PeopleService will be on call 24 hours per day, 7 days per week, for emergency situations. 1.6 PeopleService shall advise Owner and serve as Owner's liaison to regulatory agencies and industrial users in matters related to the operation of the Facilities, However, PeopleSeivice will not act as, or provide, legal counsel in this capacity. 17 PeopleServIce will SLIperviso all regulatory compliance and financial transactions pertaining to the day-to-day operation of the Facilities. Subject to the limitations of this Section 1,7, PeoplaService shall operate the Facilities in cornpliance with state and federal regulatory requirements. PeopleService will pay all fines imposed for process upsets and violation of discharge limits unless the process upsets or violations are attributable to: (a) Flows or pollutants which are not within the Design Capabilities of the Facilities; pollutants Include, but are not limited to soluble oil, heavy metals, excessive suspended sollds and excessive organic loadings; (b) Ther alfunction or failure of equipment which is not solely due to the negligent act$, errors or onnissions of PeopleService; (c) Construction activities which are undertaken to improve the wastewater treatment process but which are beyond the porating scope of services of PeopleService as delineated in this Articlo 1; or (d) Discharges from industrial facilities in violation of any pretreatment standards applicable to those discharges. In no event shall PeopleService be responsible for the payment of state or federal fines imposed or damages, attorney fees, and court costs awarded as a result of actions, Inactions, process upsets or violations which occurred prior to or existed on the Effective Date of this Agreement, and which are not due solely to the negligence of PeopleService, nor shall HmvAWscnf(chots egomp6 PeopleService be rosponsible for payment of any fines, penalties, damages or attorney's fees resulting from requiroments not expressly assumed by PeopleService herein, including any reporting requirements. With regard to potable water supplies, PeopleService will not be responsible for inherent water quality that falls to meet specifications of the Safe Drinking Water Act and amendments thereto concerning inorganic chernicals, pesticides, volatile organic chemicals, synthetic organic compounds, load and copper standards. However, PeopleService will use its best efforts to treat Owner's potable water supplies to meet drinking water standards. 1.8 PeopleService shall exercise the due care in performing its obligations and duties under this Agreement which is normally and reasonably provided with respect to similar contract services. 1.9 PeopleService will provide and maintain at all times during the term of this Agreoment the following minimum Insurance coverage: (a) Statutory Workers' Compensation Insurance in compliance with the laws of the stato of Minnesota which has jurisdiction of PeopleService employees engaged in the performance of services herounder; together with Employers Liability coverage in the amount of $500,000 for each ']incident; (b) General liability coverage of at least $5,000,000 combined single limit, each occurrence, for bodily Injury and property darnage with Owner named as additional insured, and (c) Comprehensive auto liability insurance which shall include $500,000, combined single limit coverage for bodily Injury and property damage. PeopleService will furnish Owner with Certificates of Insurance as evidence that policles providing the required coverage and limits are in full force and offect. Such policies shall provide that no less than thiel y (30) days' advance notice of cancellation, termination or RmNAfs c n (rc t\O I s e g omp 6 4 I alteration shall be sent directly to PeopleService and Owner. I ARTICLF. 11, RESPONSIBILITIES OF OW 2,1 As part of this Agreement Owner agrees to assunie the following responsibilities: (a) OwnBr shall maintain in full force and effect, in accordance with their respective terms, all guarantees, warranties, easements, permits, licenses and Other similar approvals and consents received or granted to Owner as owner of all Facilities and component parts thereof; (h) Owner shall be responsible for all capital replacement and major maintenance/repair expenditures which are defined as nonrecurring expenditures greater than $1,f , that Owner determines necessary and required, provided that PeopleService will first be consulted for Justification and need; (c) Owner shall be responsible for filing, obtaining, and maintaining current water supply operations permit and 1 permit for discharge of wastewater,, wellhead protection plans, DNR water appropriation reports, DNR water emorgency plans and conservation plans, mercury minimization plans, phosphorus management plans; and for filing all re Dire reports under the Emergency Planning and Cor MUnIty Right -To -Know Act or any other statute or authority as well as the publishing of the annual COnSUrner Confidence Report (CCR) required by the Safe DrinkIng Water Act; provided, however, PeopleService shall assist Owner with preparing these filings and reports and shall provide ongoing assistance regarding the maintenance of these permits, plans and reports; (d) Owner shall at all tinies provide access to the Facilities for PeopleService, its agents and employees; (e) Owner shall provide PeopleService the use of all existing equipment owned by Owner, Including a plow/hoist truck, necessary for the operation and maintenance of the Facilities and warrants that such operating equipment is in good condition; H:mvMfscn1r00tsego.wp6 (f) Owner shall be responsible for all damage to the Facilities, or thereof, PeopleSeivice equipment on site, and all resulting liability to any and all third partles, when SLIch damage and/or liability are caused by flood, fire, acts of God or other force majeure events, civil disturbance, extreme cold temperatUres, excessive subsoil moisture, or misuse of property to the extent Owner was negligent regarding the misuse of such property; (g) Owner shall be responsible for all fines Imposed for process upsets and violations of discharge limits attributable to the operation and maintenance of the Facilities to the extent set forth in Section 1.7 as wollas fines imposed for failure to report as required by Section 2.1 (c); (h) Owner shall designate an individual to act as liaison with PeopleService in connection with the performance of services by PeopleService under this Agreement; (i) Owner shall be responsible for all property, excise and other taxes assessed on the Facilities; I 0) Owner shall bear all costs incurred as a result of regulatory requirements not in effect on the Effective Date of this Agreement; and (k) Owner agrees to provide up to 700 hours of labor frorn RS MUnicipal employees to assist PeopleService with routine fire hydrant flushing and manhole inspections, 2.2 Owner shall maintain In full force and effect all existing policies of property and general liability insurance pertaining to the Facilities. Owner shall furnish Peopleservice with Certificates of Insurance as evidence that such policies are in full force and effect under such policles. Such policies shall provide that no less than thirty (30) days' advance notice of cancellation, termination or alteration shall be sent directly to PeopleService and Owner. 2.3 Owner shall Indemnify and hold PeopleService, its officers, employees and agents, H:mYMfscn1rc1101sago,wp6 harmless under this Agreement for any and all lair s, damages, costs or expenses caused by malfunction or failure of the Facilities or any components thereof or other liability or loss including injury, death, or damages to any person or property related in any way to the performance of this Agrooment to the extent such claims, damages, costs, expenses, liability or loss are caused by the negligent acts, errors or omissions of Owner, Additionally, Owner shall indemnify PeopleService, its officers, employees and agents harmless for any and all fines, Penalties, attorneyls fees and damages resulting from Owner's failure to comply with permitting, reporting or other statutory or regulatory requirements which are the responsibility of the Owner. This provision shall survive the termination of this Agreement. A Ick III , RESPONSIBILITIES OF PEOPLESERVI%.ov. 3.1 PeopleService shall indemnify and hold Owner, its employees and agents, harmloss under this Agreement for all claims, damages, costs or expenses caused by malfunction or 1 failure of the Facilities or any components thereof or other liability or loss including (njury, death, or damages to any person or property related in any way to the performance of this Agreement to the extent such claims, damages, costs, expenses, liability or loss are caused by the negligent acts, errors or omissions of PeopleService, This provision shall survive the termination of this Agreement. ARTICLE IV -, COMPENSATION 4.1 As compensation for services rendered by PeopleService pursuant to this Agreement, Owner shall pay to PeopleService the sum of $44,602 per month during the first twelve (12) months of this Agreement, commencing with the Effective Date. The monthly payment shall be due and payable on the first day of the month in which services are to be rendered, All other compensation to PeopleService is due upon receipt of PeopleService's invoice and payable within thirty (30) days of the date of the invoice. 4.2 The monthly compensation provided In Section 4.1 shall be adjusted on July I" of each year, begInning on July It 2009. The basis for the annual adjustment for July 1 1 2009 shall be the change in the Consumer Price Index for All Urban Consumers CPI -U) as regularly H: kwAyVs c n f (c tIO ts a g omp 6 C reported by the U.S. Bureau of Labor Statistics, between April 2008 and April 2009. For each year thereafter, the adjustment shall be the change in the CP W as reported between April of the year preceding the year of adjustment and April of the year of adjustment. This annual adjustment shall be done by letter acknowledging the change and will not require official action or contract amendment. 4.3 Within sixty (60) days of the end of the first twelve months after the Effective Date of this Agreement, Peoples ervice shall provide the Owner with a statement showing the amount of money expanded on chemicals at the facilities. Should the amount of actual expenditures for chemicals be less than the "base amount", PeopleService will include a refund equal to the portion of the base amount that remains, If the actual expenditures exceed the base amount, PeopleService shall 111CIUde an invoico equal to the amount actual oxpenditures exceed the base amount, which the Owner agrees to pay in accordance with the terms of Section 4.1 of this Agreement. The "base amount" for the first twelve montlis of this Agreement shall be $60,000. The baso amount shall be escalated annually in accordance with Section 4.2 of this Agreemetit. ARTICLE V,- TERM OF AGREEMENT M This Agreement shall remain in full fordo and effect for five (6) years from the Effective Date. The Agreement shall be automatically renewed for successive tonins of one (1) year each unless written notice of cancellation is given by either party to tho other no less than ninety (90) days prior to the date of expiration. ARTICLE V1 - TERMINATI 6.1 This Agreement may be terminated by either party in the event of the other party's breach of a material term of the Agreement, by tho first party's giving written notice of such breach and the second party's failure to correct within thirty (30) days of receipt of such notice. 6.2 PeopleService shall not be in breach under this Agreement for its failure to perform its obligations under this Agreement, to the extent that the porformance of such obligations is prevented or delayed by any event wh1oh is beyond the reasonable control of PeopleService, including but not limited to Acts of God, strikes, labor diSPLItes, and unavailability of parts, In H:vAvvA(scntrc110tsego.wpG a the event PeopleService claims that its performance is prevented or delayed by any such event, PeopleService will promptly notify Owner of that fact and the circumstances preventing or delaying its performance.. ARTICLE V!1 -MISCELLANEOUS 7,1 Any temporary or portable equipment which is provided by PeopleService during the term of this Agreement and which is not deemed part of the Facilities shall remain the property of PeopleService upon termination of this Agreement. PeopleService shall not make any expenditures for capital replacements of the Facilities or any component thereof without the prior approval of Owner unless there is an emergoncy, An emergency exists when such expenditures are necessary to continue operation of Owner's Facilities or to provide for public health, safety or environmental protection. If there is an emergency, PeopleService shall provide Owner with verbal notice of the need for the capital replacement expenditure as soon rovi as possible, Owner shall reiniburse PeopleSorvice for such emergency capital replaconlent expenditures in accordance with Section 4,1 of this Agreement. 7.2 This Agreement represents the entire agreement of the parties and may only be modified or amended in a writing signed by both parties. 7.3 Written notices required to be given Linder this Agreement shall be deemed givon when mailed by first class mail to PeopleService, Attention: President, and to Owner, Attention: City Administrator, at the addresses set forth for each in the opening paragraph of this Agreement. 7A This Agreement shall be governod by, and construed in accordance with, the laws of the state of Minnesota, 7.5 Neither party shall assign, in whole or in part, any of the rights, obligations or benefits of this Agreement except to a parent, affiliate, or wholly-owned subsidiary, without the prior written consent of the other party, which consent shall not be unreasonably withheld. For purposes of this Section 7.5, an affiliate is defined as a company, the controlling interest in H:vAvvAfscntrdk0tsego-wp6 which is owned by the parent of the party,, 7.6 Upon the Effective Date of this Agreement, that certain Operation and Maintenance Agreement dated November 16, 2005 between the Owner and PeopleServs ce shall 8WOMatiCally terminate and shall be superseded by this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written, PEOPLESERVICE, INC, President Attest: ��� � � � � h�"� Secretary H:%"wAfscnt(00tsego.WP6 10 CITY OF TSEGO, MINNESOTA 10, A -Mayor do iy AJA fi 1 sot"ra-4o r OPERATION AND MAINTENANCE AGREEME EXHIBIT A Description of Facilj'WeS For purposes of this Agreoment, the following water/wastewater utility components are included: 9 IQ water systems, The East water system is a Class "C" water system consisting of five (5) water production wells [well #1, #3, 46 & 48 with submersible pumps; well #2 with a line shaft turbine pump]; two (2) well houses with chemical addition equipment for adding chlorine, fluoride and polyphosphate; two (2) elevated water storage towers [tower #1 with a 400,000 gallon capacity and tower #3 with a 1 000,000 gallon capacity); one (1) portable emergency generator; and a water distribution system containing approximately 163,000 11neal feet of water mains of var'lous sizes (with diameters of 6 to 16 inches), approximately 500 fire hydrants, three (3) pressure control stations [station ##1 is a booster station while stations #2 & #3 are reduction stations] approximately 1 000 water valves, corporation stops, city service lines, curb stops, The west water system Is a Class "C" water systern consisting of three (3) water production wells [well fl4, #5 and #7 with submersible pumps], two (2) well hOLISes with chemical addition equipment for adding chlorine, fluoride and polyphosphate; one (1) elevated water storage tank with a capacity of 1 000,000 gallons; one (1) 15,000 gallon capacity hydro pneumatic water storage tank; one (1) portable emergency generator; and a water distribution system containing approximately 163,000 lineal feet of water mains of various sizes (with diameters of 6 to 16 inches), approximately 600 fire hydrants, 1,000 water valves, corporation stops, city service lines and curb stops, H:%ANA1AfscnfrctXOtse9Q.wp6 11 Wastewater Systeras o The east wastewater system is made up of a wastewater collection system that contains four (4) lift stations [stations #1 & #5 are submersible triplex stations, station 42 and #8 are duplex stations] approximately 115,000 lineal feet of interceptor sewer lines of varying sizes (from 8 inch to 18 inch in diameter), approximately 50,000 lineal feet of force main, approximately 600 manholes and ten (25) air releaser anholes, and eighty (80) force main isolation valves; a Class "All wastewater treatment plant containing pretreatment (a mechanical bar screen and grit removal) and process treatment through extended aeration incorporating specialized zones for nutrient roduction, with chemical addition available for assisted phosphorous removal [process clarification occurs prior to disinfection and reaeration]. Structures and equipment at this facility Include a control building with laboratory/office area, control room and pump gallery (which contains three (3) return activated sludge pumps, two (2) waste activated sludge pumps and two (2) surnp pumps) and an attached pretreatment room with mechanical screening oquipment and mechanical grit removal; two (2) oxidation ditches [ditch #1 uses an aerator incorporating four (4) selector tanks with individual mixers, ditch #2 uses a VFD controlled aerator based on an in line dissolved oxygen motor set point; ditch #2 also Incorporates three (3) anaerobic tanks and an anoxic zone each containing individual mixers]; two (2) final clarifiers; a chemical building for ferric chloride addition for phosphorOUs removal; a blower building containing six (6) blowers [four using variable frequency drives]; and a disinfection building using Ultra violet light (UV) disinfection; and in line pH and dissolved oxygen monitoring; eff Went re- aeration; one (1) aerobic digester with a decant tank; two (2) aerobic digesters with decant piping,, five (5) sludge storage tanks; a sludge thickening building which houses one (1) gravity belt thickener, a polymer injection/mixing system and a pump room with three (3) progressive cavity pumps. The site also tinaintains a 900 KW emergency generator. The treatment plant has a design average dry weather f low of 0. 900 mg d I an average wet weather flow of I -1 o rngd , a peak hourly flog of 3.294 mgd and a G loading of 2,082 pounds per day. H:vAvvAfscn1fc11O1sego.vip6 12 The west wastewater system is made up of a Wastewater, collection system that contains five (5) lift stations [station #3 and #4 are submersible triplex stations and stations #6 and #7 are su bmers-lble duplex stations], app rox! mately 110,000 11 neal feet of Interceptor sewer linos of varying sizes (from 8 inch to 18 inch), approximately 50,000 lineal feet of force main, approximately 600 manholes, twenty -five (25) air release manholes and seventy (70) force main isolation valves, and a Class "B" wastewater treatment plant containing pretreatment consisting of mechanical screening and grit removal with process treatment accomplished through extended aeration incorporating specialized zones for nutrient reduction with chemical addition available for assisted phosphorous removal [process clarification occurs prior to disinfection); strUCtUres at the plant include a control building with laboratory/office areas and control room, a preliminary treatment building with mechanical screenings removal, mechanical grit removal, and a pump gallery containing three (3) return activated sludge pumps, two (2) waste activated sludge PLIMPS, and two (2) sump pumps; two (2) oxidation ditches; three (3) anoxic selector tanks for biological phosphorous removal; three (3) anoxic tank mixers; two (2) final clarifiers; chemical addition for phosphorous removal; ultra violet light (UV) disinfection; one (1) aerobic digester and decant pump; one (1) one million gallon sludge storage tank and decant pump; a sludge thickening building which houses one (1) gravIty belt thickener, a polymer injectiontmixing system, a pump room with four (4) progressive cavity pumps and one (1) sludge storage mixing pump, a chemical room for chemical addition phosphorous removal and a blower room with three (3) blowers; and one (1) 600 KW stationary emergency generator, The treatment plant has an average design flow capacity of 0.600 rngd with an influent [BOD loading of 204 mg/l, influent TSS strength of 240 rng/L and phosphorous loading of forty (40) pounds per day. H:mwAfsontrctkO1seqO.wp6 13 OPERATION AND MAINTENANCE AGREEMENT Services to be Provided- -by- —PeopleServicO Except as otherwise provided in the Operation and Maintenance Agreement, and subject to the limitations set forth therein, PeopleService shall provide the following services to Owner in connection with the Facilities: PeopleService will provide the personnel necessary to manage, operate and maintain tho City's water production, water treatment, water distribution, wastewater collection and wastewater treatment facilities in order to achieve optinium performance and to maintain equipment for system integrity, within the Owner's budgeted resources. PeopleService will provide technical training to the water and wastewater operators on treatment process, preventive maintenance techniques, and safety awareness, including the continuing education units (CEU's) necessary for the operating personnel to maintain their licenses. -PeopleService will procure and pay for all communication services including three (3) phone lines and high speed Internet service (except for the alarm systems), consumable supplies, chemicals, vehicle fLielS, and materials and services (E)XCept the annual Genorator System Services, [no contract) necessary for the safe and efficient day to day operations. Monitor, sample, analyze, and report as required by the Minnesota Department of Health (MDOH) in matters related to municipal water supply. Testing will include those tosts necessary to maintain the daily operation of the water system and for coliform bacteria. Any additional testing costs as required by regulatory agencies such as but not limited to inorganic chemicals, synthetic organic chemicals, volatile organic chemicals and pesticides will be the responsibility of the Owner. H:m,xAfscnt(ctI0tse90-VIP6 14 PeopleService will mon vitor, sample, analyze, and report as required by the Minnesota Pollution Control Agency (MPOA) and the NPDES permits issued for the wastewater treatment faollifies, excluding the Priority Pollutants and Acute Toxicity testing as defined in Chapter I of NPDES Permit MN 0064190. Testing will also include those tests necessary to optimize and maintain the daily operation of the wastewater treatment planLs. PoopleService will act as a liaison betwoen the Owner and the MDOH/MPCA and to the federal E.P.A. in matters relating to compliance with water quality and discharge requirements, and other liaison activities, as required. PeopleServico will be responsible for effluent qualify, including liability for fines and civil penalties should permit conditions be violated, while plant loadings and flows are within the design capability of the wastewater treatment plant, but only in those situations where the permit condition could have been met using existing in-place plant equipment. PeopleService will coordinate and direct the -disposal of the bio-sollds from the wastewater treatment plants (a properly certified operator will, on behalf of the Owner, seek quotes from firms for theapplication of the blo-solids; will assist in securing land application sites; and will oversee the actual application of the blo- solids using the contractor selected by the Owner). Any cost of securing or maintaining the land application sites and the cost of the third party contractor doing the actual disposal work will remain the responsibility of the Owner. In addition, PeopleService will maintain the required records for compliance with the MPGA and 11503" sludge regulations., PeopleService will implement the use of a comprehensive, preventative maintenance program in an attempt to ensure the projected life expectanGy of plant equipment, and will enforce existing equipment warranties and guarantees, and maintain all warranties on any new equipment purchased after the effective date of an agreement, H: VAWA fSIN. n t (C RO ES e 9 0 M06 15 With assistance from the Owner's employees, PeopleService will flUsh all fire hydrants twice each year to maintain water quality in the distribution system. Preventative maintenance shall be performed on all hydrants on an annual basis. PeopleService will implement a water main valve exercising program that will include the identification of valve locations in a "Tie Book" and the operation of twenty percent (20%) of the valves each year. 01 Mth assistance frown the Owner's employees, PeopleService will implement a sanitary sewer manhole inspection program that will include the identification of manhole locations in a "Tie Book" and the Inspection of twenty percent (20%) of the manholes each year. ■ PeopleService will complete all turn 'Ions" and turn "offs" of water service requested by the Owner, but all other work with water nieters/service (such as bUt not limited to high/low usage complaints, bulb water sales, meter installations, meter repairs, etc.) shall be the responsibility of the Owner. If repairs of the Owner's water distribution system or wastewater collection system aro to be made, and excavation is required, PeopleService will coordinate the repair Wing a contractor chosen by the Owner. The excavation, repair and any surface restoration work will be the responsibility of the contractor, with the cost of the contractor being the responsibility of the Owner. ■PeopleService will maintain cleanliness of process equipment and buildings, and general appearance of all buildings and grounds, except for the mowing of grass and will conduct operations such that nuisances of sight, sound, and odor are eliminated or minimized to the extent reasonably possible, Using a vehicle provided by the Owner, PeopleService will plow the snow at all water and wastewater facilities, including lift stations, and when possible, will pull pumps for necessary routine maintenance, repairs and inspections, H:vwvAfscntrct\01sego-wp6 -16 I I M Within the limits of available security devices, PeopleService will secure and protect -% utility facilities for which it is responsible. M PeopleService will provide a monthly, written report to designated Officials of the Owner, summarizing plant performance, production, flows, major projects or accomplishments, and preventive and corrective maintenance activities for the month. PeopleService will comply with all applicable city, state, and federal laws, regulations, and administrative rLI18S. PeopleService will use a professional manner in dealing with community groups concerned with any facet of the operations, including tours and other public relations programs. PeopleService will coordinate and cooperate with the Owner's Engineer and contractors to facilitate the completion of any expansion orimprovement to the facilities. 0 PeopleSeivice will serve as liaison between the Owner and any now or existing Major contributing industries, and pro ride technical assistance to the Owner in consultation to existing industries and to any new industries, in matters relating to their pretreatment process, or agreements with the Owner and/or the MPGA. IM PeopleService offers several types of professional services to our clients without charge, We term these additional services as "value added" services that clearly differentlate us from the typical O&M contract services provider. By providing these studies, audits, and assessments, we hope to gain a firm knowledge of our clientis systems and at the same time increase our value to them so that we are able to establish a long-term, lasting relationship, The following lists our" alue added" services, which we provide to our clients as part of out" support services package: a Five Year Water/Wastewater Capital Improvements Assessment and O&M KmAyVs entfollO ts eg osipO 17 L Budgeting Assistance Water and/or Wastewater Rates Study industrial Pre -Treatment Investigation Laboratory Quality Assurance and Quality Control (QA/QC) Program - miso ellaneoLLs A - PeopleService will provido the necessary information to complete all forms required through the administration of the water and wastewater treatment systems. PeopleService will not be required to pay any fees associated with the licenses or permits re Tired by the state agencies. PeopleService will pay all expenses associated with the individual operator certification. B - PeopleService will not be responsible for any additional costs associated with any construction project or upgrades involving the water and/or wastewater systems. C - For services requested by the Owner and provided by PeopleService that are beyond the Scope of services contained in this Exhibit B, (Peoples ervice shall charge the Owner at the rate of $50 per hour between the hours of 8:00 as and 5:00 p.m Monday through Friday (except for holidays). At all other times and during holidays, the billing rate shall be $75 per hour. Hours billed shall include any required travel time. Owner agrees to pay Invoices for said charges in complIance with the terms contained in the paragraph 4.1 of this Agreement, H-vNNNscnVo1�0tsegomp13 18 FIRST AMENDMENT TO O&M AGREEMENT WHEREAS, PeopleService, Inc., a Nebraska corporation (PeoploService ), entered into an Agreement with the City of Otsego, Minnesota, dated June 9, 2008, for the management, operation, and maintenance of the Owner's water and wastewater treatment systems (the "Agreenient"), lee, WHEREAS, the Agreement was mouitfed by Letter of Acknowledgement effective July 1, 2009; and WHEREAS, the parties desire that the Agreement be amended to Include the sampling requirements contained in the now permit issued for the east wastewater treatment facility. NOW, THEREFORE the Agreement made and entered into between the City of Otsego, 'N.11 *. Minnesota and PeopleService dated erne 9, 2008, for thew managent, op"e�avo - ns, and m a 1 nte na n ce of the Own e r's ter a n d wa stewtiter treatment Wed as system &- is a ni �follows: 1W Paragraph 4.1 is hereby amended to increase the tinonthly payment froom $44';290 to $44,435. ts The first bullet on page 15 (Exhibit B, Scope of Services) is hereby deleted in its entirety and will be replaced by the following'. "PeopleService will monitor, sample, analyze, and report as required by the Minnesota Pollution Control Agency (MPGA) and the NPDES port -nits issued for the waste rater treatment facl I ities (Permit N o. X1 00 662 57 effective July 3 0, 2 0 0 8� for the west treatment plant and Permit No. MN0064190 effective May 15, 2009 for the east treatment plant Interlm period), excluding the Priority Pollutants and Acute Toxicity testing as defined in Chapter I of PC ES Permit MN0064190, Testing will also include those tests necessary to optimize and maintain the daily operation of the wastewater treatment plants." Except as amended herein, and as modified by the Letter of Acknowledgment dated June 29, 2009, the Operations and M aln ton ance Ag reennent entered into by the parties on June 9, 2008 ir, hereby ratified and confirmed and shall remain in full force and effect in accordance with the terms and conditions thereof, This amendment shall be effective July 1, 2009, and is agreed to by both parties as evidenced by endorsement below. PEOPLESERVICE, INC. By: 4 President-V1 Atteft�� ��' L� kssist0t Secretary OTSEGO, MINNESOTA f ! � Ali' � ! �/ At t City ministrator SECOND AMENDMENT TO O&MAGREEMENT WHEREAS, PeopleService, [no,, a Nebraska corporation eo leS r ►io , entered into n Agreement with the city of Otsego, Minnesota, dated Jure 9, 2008, for the management, operation, and maintenance of the Owner's water and wastewater treatment systems the "Agreement"), VVHE EAS-� 1he Agreement was modified by Letter of Acknowledgement effective July 1, 2009 and was amended in writing effective July 1, 2009; and WHEREAS, the parties desire that the Agreement a amended to include changes in the services for the wafer distribution system, and wastewater collection system that are provided by P e leS r ice. NOW, THEREFORE the Agreement rade and entered into between the City of Otsego, Minnesota and Pee leSer ice dated June 9, 2008, for the management, ement, o erati ns, and maintenance of the Owner's water and wastewater treatment systems is amended as follows; Paragraph 4A is hereby amended to increase the monthly payment from } $44,435 to$441820P The Description of Facilifiles contained in Exhibit A of the Agreement is hereby amended to include the instillation of SCADA equipment on Ilft ,stations Nos, 4, 6 and 7 in the west wastewater Ile ti n system, Owner, hereby agrees that said equipment will he installed by June 30, 2010 with all installation costs being the responsibility of the Owner. The bacterial testing required as part of the fourth bullet on page 1 (Exhibit Scope of Seri is her=eby amended to Include the seven monthly tests (previous requirement was four) required as of the effective date of this amendment, `+ The third bullet on page Exhlhlt B, Scope of Services) is hereby deleted ted in its entirety and will be replaced by the following: "PeopleService shall assist the Owner's employees in completing the letting/vacuuming of at least twenty percent % of the Owner's wastewater collection system each year, and as part of this work, shall complete inspections of the manholes in that portion of the system. It The fourth bullet on page 1 (Exhibit 13, Scope of Services) is hereby deleted in its entirety. Except as amended herein, and as modified by the C eater ofAcknowledgment dated JUne 29, 2009 and amended effective July 11 2009, the Operations and Maintenance Agreement entered into by the rtles onJune 9. 2008 is hereby stifled and confirmed and shall remain In full force and effect in accordance with the ternis and condiflons It thereof, This arnendme nt shal I be. effective April 1, 2010, an d is agreed to by both parties as evidenced by endorsement below, PEO'PLEBE RVICE, INC. BYE President Attest: Assistant Secretary OTSEGO, MINNESOTA